The appreciation of the peso is supported by the expectation that the Fed will stop raising rates, while the Bank of Mexico could continue raising them, as they indicate that the upward risks for inflation continue. Likewise, the decision to raise the rate 25 base points to 11.25% yesterday Thursday was unanimous, which sends the signal that there is a consensus within the Governing Board, despite the fact that general inflation shows a moderate downward trend.
“The appreciation of the peso is also supported by a greater appetite for risk in the global financial market, which allows gains for currencies of emerging economies,” said Gabriela Siller, director of economic analysis at Banco Base.
Siller adds that from a technical approach, the exchange rate resumed its downward trend and it is likely that in the short term it will head towards the minimum in the year of 17.8981 pesos, seen on March 9. If the minimum for the year is reached, it is not ruled out that the exchange rate will go to the level of 17.75 pesos per dollar.
Following the inflation data in the United States, the president of the Boston Fed, Susan Collins, indicated that it is still “early” for the central bank to determine if rates have risen enough to reduce inflation to its objective of 2 %.
“We are watching all the speeches and comments from the Fed, because their track record has really been what has driven the market,” said Rob Haworth of US Bank Wealth Management in Seattle.
With information from Reuters